Correlation Between Kohls Corp and OReilly Automotive
Can any of the company-specific risk be diversified away by investing in both Kohls Corp and OReilly Automotive at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kohls Corp and OReilly Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kohls Corp and OReilly Automotive, you can compare the effects of market volatilities on Kohls Corp and OReilly Automotive and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kohls Corp with a short position of OReilly Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and OReilly Automotive.
Diversification Opportunities for Kohls Corp and OReilly Automotive
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kohls and OReilly is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and OReilly Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OReilly Automotive and Kohls Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kohls Corp are associated (or correlated) with OReilly Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OReilly Automotive has no effect on the direction of Kohls Corp i.e., Kohls Corp and OReilly Automotive go up and down completely randomly.
Pair Corralation between Kohls Corp and OReilly Automotive
Considering the 90-day investment horizon Kohls Corp is expected to under-perform the OReilly Automotive. In addition to that, Kohls Corp is 3.21 times more volatile than OReilly Automotive. It trades about -0.15 of its total potential returns per unit of risk. OReilly Automotive is currently generating about 0.25 per unit of volatility. If you would invest 114,659 in OReilly Automotive on September 2, 2024 and sell it today you would earn a total of 9,663 from holding OReilly Automotive or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kohls Corp vs. OReilly Automotive
Performance |
| Timeline |
| Kohls Corp |
| OReilly Automotive |
Kohls Corp and OReilly Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kohls Corp and OReilly Automotive
The main advantage of trading using opposite Kohls Corp and OReilly Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kohls Corp position performs unexpectedly, OReilly Automotive can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OReilly Automotive will offset losses from the drop in OReilly Automotive's long position.| Kohls Corp vs. Nordstrom | Kohls Corp vs. Dillards | Kohls Corp vs. Marks Spencer Group | Kohls Corp vs. Marks and Spencer |
| OReilly Automotive vs. Dicks Sporting Goods | OReilly Automotive vs. Ulta Beauty | OReilly Automotive vs. Williams Sonoma | OReilly Automotive vs. RH |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |